firstrand wealth segment · the segment in context 77,084 (multi-banked) 250,593 ... • wealth...
TRANSCRIPT
FirstRand Wealth Segment
History
FNB established FNB Private Bank1995 RMBestablished
ORIGIN
1997
FNB Private Bank changed toHenry Ansbacher
1999
“One FNB” and ONE Wealth Segment Executive committeeOct2004
RMB Private Bank FNB Private Clients
Ansbacher and Origin combined to form RMB Private BankApril2003
FirstRand’s positioning
Focus of RMB Private Bank
Portfolio of brands enables niche focus.
30 000FNB Clients
Focus of FNB Private Clients
The segment in context
77,084(Multi-banked)
250,593
(Multi-banked)
Source: AMPS 2002a – 2004, Market Tracker November 2004
Total Retail Market
WealthR750K +
Low IncomeR0k – R6k
Mainstream R6k – R60k
Upper middle R200k – R350k
PremierR350K – R750k
Lower middleR60k – R200k
18%
Total Adult Population 30 MillionTotal Banked Population 11,5 Million
15,559,628 (19% banked)
11,622,512 (52% banked)
510,185(97% banked)
2,019,592 (97% banked)
FNB main bank share (2004)
21%
20%
18%
17%
19%
Per
sonal
Ban
king
Sm
art
Solu
tions
837,862 –previously est. 400k-600k
Total segment - client numbers
Net
Ass
et V
alue
(R M
illio
n)
0.75
* Source: AMPS 2002 a – 2004, Market Tracker November 2004
** 2005 Cap Gemini and Merill Lynch World Wealth Report
* 80 000 to 150 000
** 37 000
3 000
7
50
50
7
Total segment - product usageN
et A
sset
Val
ue
(R M
illio
n)
0.75
StructuredLending
TransactionalBanking
Risk/Assurance
StructuredLending
TransactionalBanking
Risk/Assurance
SuccessionPlanning
Structured andCorporate Finance
Financial Planning andFiduciary Services
AssetManagement
Financial Planning andFiduciary Services
AssetManagement
StructuredLending
TransactionalBanking
Risk/Assurance
Total segment - revenue distribution
Based on RMB Private Bank actuals
Margin income
Transactional banking income
Financial Planning and Asset Management fee
income
Lending Structuring fee income
3.4
7
R 3.4 billion
Total segment - revenue potential
50
6.4
R 3.0 billion
7.72
R 0.8 billion
Revenue (R Billion)
0.75
Net
Ass
et V
alue
(R M
illio
n)
Competitive landscape
7
50
Net
Ass
et V
alue
(R M
illio
n)
0.75
Private Bank
Personal Financial Services Private Bank
Personal Financial Services Private Bank
PRIVATE BANK Private Bank
StockBrokers IFA’S
StockBrokers IFA’SPrivate Bank
Priority Suite
Priority Suite
Other insights
7Net
Ass
et V
alue
(R M
illio
n)
0.75
Low penetrationof investment products Multi-banked
58%is under
45 years of age
Fastest blackgrowth segment
74%is business
owners
30%is black
The key issues
• Client numbers are small and clients are multi-banked.
• Fierce competition.
• Biggest revenue potential is in lending and combined financial planning and asset management.
• Most clients are business owners.
• It is the fastest growing black sector.
The key issues
• Client numbers are small and clients are multi-banked.
• Fierce competition.
• Biggest revenue potential is in lending and combined financial planning and asset management.
• Most clients are business owners.
• It is the fastest growing black sector.
FirstRand – customer base
FirstRand’s base provides huge opportunity
150 000 individuals
FNB20%
RMB PB10%
FNB30 000
Mostly using only transactional
banking at FNB
RMB Private Bank 15 000
Financial planning, asset management
and structured finance in
“seedling” phase
The key issues
• Client numbers are small and clients are multi-banked.
• Fierce competition.
• Biggest revenue potential is in lending and combined financial planning and asset management.
• Most clients are business owners.
• It is the fastest growing black sector.
RMB Private Bank – leader in structured lending
Structured Facility
Property Investments
Can be in any legal entity
Natural Person
Can be in any legal entityTrust
Partnerships
PTY
CC
2.12.8
4.8
5.9
8.3
11.7
0
2
4
6
8
10
12
2000 2001 2002 2003 2004 2005
Strong growth in advances
Loan book growth
R b
illio
n
36% 53% 40% 39% 41%
RMB Private Bank - leader in wealth management
Global
Product comparison
Asset Allocation*All asset classes
Disciplined Investment approach
Succession planning
Growth portfolio
Defensive portfolio
IncomePortfolio
Tax structure
Investment planningCash flowanalysis
Estate planning
Ad
vic
e
Outside
Trust servicesLocal & Off-shore
Ashburton
RMB Asset ManagementUnit
Trusts
Local/London
Multi-manager platforms
Insurance license
Best of breed products
• Life assurance• Disability
• Investment products
Deposit products
Direct investment into shares
FirstRand GroupRMB Branded
So
luti
on
s
Client & Wealth Advisor Co-Piloting theClient Solution
Client needs fulfilled
My wealth is preserved
My wealth is growing
My ability to grow my wealth is protected
My wealth will be correctly distributed
My dependants are protected
I am informed of investment opportunities
Different for every client
Good track record
Assets under management growth
5.7 6.2
5.1
6.7
10
0
1
2
3
4
5
6
7
8
9
10
2001 2002 2003 2004 2005
8% 17% 31% 50%
The key issues
• Client numbers are small and clients are multi-banked.
• Fierce competition.
• Biggest revenue potential is in lending and combined financial planning and asset management.
• Most clients are business owners.
• It is the fastest growing black sector.
FirstRand well positioned
• RMB Private Bank is a leader in structured lending.
• In financial planning and asset management, RMB Private Bank has a sound basis for growth.
• Structured Finance will be enhanced using the close link with Rand Merchant Bank.
• FNB’s 30 000 wealth clients is not yet using FirstRand for these offerings.
RMB Private Bank FNB
Huge opportunity for growth
Key issues
• Client numbers are small and clients are multi-banked.
• Fierce competition.
• Biggest revenue potential is in lending and combined financial planning and asset management.
• Most clients are business owners.
• It is the fastest growing black sector.
FirstRand well positioned
• Structured lending is a key value offering for business owners.
• Successful history of collaboration between RMB Private Bank and the commercial segment is a sound foundation.
• Wealth Segment and business segment has agreed to service this segment with one combined offering.
• Launched Personal Business Banking.
RMB Private Bank FNB
FirstRand is leading with a combined Business Banking and Private Banking offerings
The key issues
• Client numbers are small and clients are multi-banked.
• Fierce competition.
• Biggest revenue potential is in lending and combined financial planning and asset management.
• Most clients are business owners.
• It is the fastest growing black sector
Note: n = 1,650. Other banks = ABSA, Nedcor and Standard Bank Source: Consumer Tracker Research November 2004 and Amps 2004
Race profile of market segments:
FNB has strong pipeline
Overall segment strategy
• Compete with 2 brands
Overall segment strategy
• Compete with 2 brands
• Continue to enhance RMB Private Bank’s Value offering
Overall segment strategy
• Compete with 2 brands
• Continue to enhance RMB Private Bank’s Value offering
• White-label RMB Private Bank Products and introduce them to the 30 000 FNB Wealth segment clients.
Overall segment strategy
• Compete with 2 brands
• Continue to enhance RMB Private Bank’s Value offering
• White-label RMB Private Bank Products and introduce them to the 30 000 FNB Wealth segment clients.
Share support infra-structure.Eliminate pricing arbitrage.
Implementing two brand strategy
Contact centre
Project implementation
Financial planning, asset management andstructured lending operations
Wealth Exco
Client facing
Credit and valuations
Shared infrastructure
All delivery Channels All delivery Channels
Stratco Stratco
Common purpose and no destructive competition
FNB Private Clients RMB Private Bank
Go to market strategy for FNB Private Clients
• Leverage existing relationships
• No client migration
• Revenue growth
• 10 to 50
• 8 to 15
• Wealth management specialists
Existing relationships
• Structured lending specialists
• Relationships managers
• Someone in a branch
Strategy = growth
RMB Private Bank is a leader in structured
lending and comprehensive Wealth
Management
Rand Merchant Bank is a leader in Structured
Finance and Investment Banking
FNB has 30 000Wealth Clients who have
limitedexposure to these value
offerings
Leverage RMB’s skill base into the top end of RMB
Private Bank
Growthout
performance
Leverage RMB Private Bank value offerings into
FNB